1) Nature of Operations
 
 Spanco Limited (Spanco or the Company) is a leading Technology
 Infrastructure Company with dedicated Telecom, System Integration and
 BPO arms. Spanco is SEI CMM Level 3 and ISO 9001-2008 certified.
 
 Spanco has a dedicated System Integration (SI) unit which ranks amongst
 the best in the country and caters to very large SI projects across
 Government, Power and Telecom Service Providers space. The Company
 provides high quality, cost effective scalable SI solutions.  Spanco
 Limited also has a formidable presence in the BPO space spread over
 four continents and catering to India, US, Europe and Middle East.
 
 Within the SI Business, the Company has dedicated teams addressing
 opportunities in e-Governance, Power Sector, Transport, Telecom Service
 Provider and PSUs.  Spanco has a dedicated unit Government
 Transformation Services which utilises its propriety services to help
 central and various state governments become more efficient by the use
 of information technology.
 
 The Companys Service Provider Business Unit caters to carriers in
 India providing solutions to meet the networking infrastructure
 requirements using cutting- edge technologies.
 
 The Companys offerings within the Power space revolve around utilising
 information technology to increase the efficiency of power
 distribution. Spanco is empanelled as a SI with Power Finance
 Corporation (PFC) and aggressively participating in modernisation
 programs like R-APDRP and Distribution Franchise.
 
 3) Particulars of security provided and other details of Secured Loans
 
 a.  The debentures of Rs. 200,000,000 (P. Y.  Rs. 500,000,000) are
 secured by a legal mortgage in English form in favour of the trustees
 on all the Companys properties situated at C01 / 5008, 5th Row, Ground
 Floor, A wing, City Mall situated at Plot No 4, Sector 19, Vashi Navi
 Mumbai, Maharashtra.
 
 The debentures of Rs. 920,000,000 (P.  Y.  Rs. 920,000,000) are secured
 by a legal mortgage in English form in favour of the trustees on all
 the Companys properties situated at C01 / 5008, 5th Row, Ground Floor,
 A wing, City Mall situated at plot No 4, Sector 19, Vashi Navi Mumbai,
 Maharashtra.
 
 The debentures of Rs. 920,000,000 are further secured by way of first
 charge, ranking pari passu, on all the fixed assets (moveable and
 immoveable) except all assets having exclusive charge in favour of
 respective lenders. It is also secured by way of first charge, ranking
 pari passu, on all the fixed assets (moveable and immoveable) of Spanco
 BPO Services Limited and Spanco Respondez BPO Private Limited,
 subsidiaries of the Company. The charge on the assets of the
 subsidiaries has been subsequently released on August 05, 2010.
 
 b.  i) Term loans from banks are secured by first mortgage / equitable
 mortgage and charges on immovable properties including investment
 property, second pari passu charge on all moveable assets of the
 Company and also by way of personal guarantee of a director and pledge
 of equity shares held by the Company in one of the wholly owned
 subsidiary.
 
 ii) Term loans from others are secured by respective assets taken on
 loan.
 
 c.  Vehicle Loans are secured by way of hypothecation of vehicles
 acquired out of the said loans.
 
 d.  Working capital facilities from banks are secured by way of first
 charge on all the movable fixed assets, stock, entire book debts,
 receivables and other current assets of the Company both present and
 future ranking pari passu with all banks and also by way of personal
 guarantee of a director.
 
 e.  Amount of secured loans repayable within one year Rs. 1,387,457,663
 [P.Y. Rs.2,416,356,761].
 
 2) Issue of Debentures
 
 During the year 2008-09 the Company had issued 500,000 secured
 redeemable non-convertible debentures of Rs. 1,000 each amounting to
 Rs. 500,000,000 carrying an interest at MIBOR plus 800 BPS (floor
 13.95% & CAP 14% p.a.) on a private placement basis. During the year,
 the tenure of debentures amounting Rs. 400,000,000 was restructured by
 the debenture holder so as to redeem the same in eight equal
 instalments starting from December 28, 2009 upto June 30, 2010. Out of
 the restructured debentures, debentures of Rs. 200,000,000 were
 redeemed during the year along with interest thereon.
 
 The Company had issued 20 secured redeemable non- convertible
 debentures of Rs.1,000,000 each amounting to Rs. 20,000,000 on a
 private placement basis during the year 2008-09 carrying an interest at
 11% payable half yearly and the same are due for redemption in two
 equal instalments on 3rd July 2012 and 2013.
 
 The Company had issued 200 secured redeemable non- convertible
 debentures of Rs. 1,000,000 each amounting to Rs. 200,000,000 on a
 private placement basis during the year 2008-09 carrying an interest at
 11.25% payable monthly and the same are due for redemption in two equal
 instalments on 3rd July, 2012 and 2013.
 
 The Company had issued 700 secured redeemable non- convertible
 debentures of Rs. 1,000,000 each amounting to Rs. 700,000,000 on a
 private placement basis during the year 2008-09 carrying an interest at
 11.25% payable half yearly and the same are due for redemption in two
 equal instalments on 10th July 2012 and 2013.
 
 The Company has created debenture redemption reserve in accordance with
 the provisions of section 117C (1) of the Companies Act, 1956.
 
 The Company has fully utilised the proceeds of the preferential issue
 of equity shares, received during the year, for the purpose for which
 the money was raised.
 
 3) Revaluation of Fixed Assets
 
 On July 01, 2009 the Company has, based on the report of an independent
 valuer, revalued its Building by an amount of Rs. 332,253,384/- to
 disclose its true and fair value and an equivalent amount is credited
 to Revaluation Reserve Account. Consequent to the said revaluation
 there is an additional charge of depreciation amounting to Rs.
 12,470,880/- and an equivalent amount has been withdrawn from
 Revaluation Reserve Account and credited to Profit and Loss Account.
 This has no impact on profit for the year.
 
 4) Segment information
 
 The Company is operating in a single segment i.e.  System
 Integration. Further as stated in paragraph 4 of Accounting Standard
 17 - Segment Reporting, the Company has disclosed segment information
 in its Consolidated Financial Statements and hence it is not disclosed
 in these financial statements.
 
 5) Related party disclosures under Accounting Standard 18 issued by
 the Institute of Chartered Accountants of India
 
 a.  The following are the names of related parties and description of
 relationship :
 
 I) Where control exists, irrespective of whether transactions have
 occurred or not:
 
 i.  Subsidiaries
 
 a.  Spanco BPO Ventures Limited
 
 b.  Spanco BPO Services Limited *
 
 c.  Spanco Respondez BPO Private Limited *
 
 d.  Spanco Europe Limited, U.K.
 
 e.  Spanco Limited, Dubai U.A.E.
 
 f.  Spanco (S) Pte. Limited, Singapore
 
 g.  Global Respondez Inc., U.S.A.
 
 h.  Spanco Global Solutions Private Limited
 
 i.  Spanco Great IT Private Limited
 
 j.  Skandsoft Technologies Private Limited
 
 k.  Spanco Holdings Inc.,U.S.A.*
 
 I.  Spanco Infratel Private Limited
 
 m.  Spanco IT Infrastructure Private Limited
 
 n.  New Delhi Teletech Private Limited
 
 o.  Spanco CSC Limited (formerly known as New Delhi Tele-Ventures
 Limited)
 
 p.  Spanco International Pte. Limited, Singapore (upto March 30, 2010)
 
 q.  Spanco Respondez Services Limited (upto March 30, 2010)
 
 r.  Spanco (Mauritius) Limited ** (Upto June 30,2009)
 
 * These companies are the wholly owned subsidiaries of Spanco BPO
 Ventures Limited.
 
 ** This company is wholly owned subsidiary of Spanco (S) Pte., Limited.
 
 ii.  Joint Ventures
 
 a.  Bharat BPO Services Limited
 
 b.  Spanco Golden Key Solutions LLC ***
 
 c.  Spanco Golden Key Solutions WLL ***
 
 *** These companies are the joint ventures of Spanco Limited, Dubai
 U.A.E.
 
 II) Names of related parties with whom transactions have taken place
 during the year
 
 i.  Subsidiaries
 
 a.  Spanco BPO Ventures Limited
 
 b.  Spanco BPO Services Limited *
 
 c.  Spanco Respondez BPO Private Limited *
 
 d.  Spanco Europe Limited, U.K.
 
 e.  Spanco Limited, Dubai U.A.E.
 
 f.  Spanco (S) Pte. Limited, Singapore
 
 g.  Global Respondez Inc., U.S.A.
 
 h.  Spanco Global Solutions Private Limited
 
 i.  Spanco Great IT Private Limited
 
 j.  Skandsoft Technologies Private Limited
 
 k.  Spanco Infratel Private Limited
 
 I.  Spanco IT Infrastructure Private Limited
 
 m.  New Delhi Teletech Private Limited
 
 n.  Spanco CSC Limited (formerly known as New Delhi Tele-Ventures
 Limited)
 
 o.  Spanco Respondez Services Limited
 
 * These companies are the wholly owned
 
 subsidiaries of Spanco BPO Ventures Limited
 
 
 ii.  Joint Ventures
 
 a.  Bharat BPO Services Limited
 
 b.  Spanco Golden Key Solutions LLC **
 
 c.  Spanco Golden Key Solutions WLL **
 
 ** These companies are the joint ventures of Spanco Limited, Dubai UAE
 
 
 iii.  Key Management Personnel
 
 a.  Mr. Kapil Puri (Chairman and Managing Director)
 
 b.  Mr. Deepak Bhagchandaney (Deputy Managing Director)
 
 c.  Mr. Adarsh Bagaria (Whole Time Director) 
 
 
 III) Other related parties
 
 i.  Relatives of Key Management Personnel
 
 a.  Mrs. Kavita Kapil Puri
 
 b.  Mrs. Geeta Deepak Bhagchandaney
 
 c.  Mrs. Sarika Adarsh Bagaria
 
 
 ii.  Enterprise owned or significantly influenced by group of
 individuals or their relatives
 
 a.  Percept Trading Private Limited
 
 b.  Steady Growth Properties Private Limited
 
 c.  Global Respondez Services Limited
 
 
 Figures in brackets indicate previous year numbers,
 
 
 1.  Corporate guarantee of Rs. 455,800,000 (USD 10.00 Millions) [RY.
 Rs. 517,601,300 (USD 10.00 Millions)] given in favor of ICICI Bank,
 Singapore for providing working capital facility to wholly owned
 subsidiary Spanco (S) Pte. Limited
 
 2.  Corporate guarantee of Rs. 520,000,000 [RY. Rs. 520,000,000] given
 in favor of Cisco Systems Capital India Private Limited on behalf of
 wholly owned subsidiary New Delhi Teletech Private Limited
 
 3.  Corporate guarantee and undertaking given to One North East, NY for
 making an offer of grant to wholly owned subsidiary Spanco Europe
 Limited of Rs. 6,204,600 (90,000 pounds) [P.Y Rs. 6,618,998 (90,000
 pounds)]
 
 4.  Corporate guarantee of Rs. 9,456,000 given in favor of Rentworks
 India Private Ltd. for availing operating lease on behalf of wholly
 owned subsidiary Spanco BPO Services Limited
 
 5.  Corporate guarantee of Rs. 100,000,000 given in favor of IDBI Bank
 for providing cash credit facility on behalf of wholly owned subsidiary
 Spanco BPO Services Limited
 
 6.  Corporate guarantee of Rs. 120,000,000 given in favor of Bank of
 Maharashtra for obtaining cash credit facility on behalf of wholly
 owned subsidiary Spanco Respondez BPO Private Limited
 
 7.  Corporate guarantee of Rs. 374,559,108 given in favor of SREI
 Equipment Finance Private Limited for availing operating lease
 assistances / facilities on behalf of wholly owned subsidiary Spanco
 BPO Services Limited
 
 6) Particulars of assets acquired / given under lease
 
 Operating leases
 
 Office premise and Plant & Machinery are obtained on operating lease.
 The lease term for different agreements are from 11 months to 36 months
 and renewable for further period at the option of the Company. Out of
 the several contracts three of the contracts contain an escalation
 clause, two of which with 15% after 3 years and the balance one with 6%
 after every 11 months. There are no restrictions imposed by lease
 arrangements. There are no subleases.
 
 Finance leases
 
 Plant & Machinery and Capital Work-in-Progress includes machinery /
 equipments obtained on finance lease. Lease term is for 36 to 60 months
 after which legal title is passed to lessee. There is no escalation
 clause in the lease agreement. There are no restrictions imposed by
 lease arrangements. There are no subleases.
 
 Operating leases - assets given on lease
 
 The Company has leased out premise, Plant & Machinery and Equipments
 etc. on operating lease. The lease term is for 36 to 60 months. There
 are escalation clauses in the certain lease agreement and the lease is
 renewable at the option of the lessee. There are no restrictions
 imposed by lease arrangement.
 
 7) Interest in Joint Ventures:
 
 The Company has a 49.75% interest in assets, liabilities, expenses and
 income of Bharat BPO Services Limited, incorporated in India, which is
 involved in Domestic Call Centre services.
 
 8) Capital Commitments
 
 Estimated amount of contracts remaining to be executed on capital
 account not provided for (net of advances) Rs. 512,385,767 [P.Y. Rs.
 1,596,180,871]
 
 9) Contingent Liabilities
 
                                                      (Amount in Rupees)
 
 
 Sr.
 No.  Particulars                           As at                As at
 
                                      March 31,2010       March 31,2009   
 
 1 Letters of Credit issued 
   by bankers                           181,190,310         105,217,452
 
 2  Guarantees given by banks 
    on behalf of the Company          1,773,853,232       1,460,186,285
 
 3  Guarantees and counter 
    guarantees given by the
    Company                           1,595,531,456       2,417,226,098
 
 4  Income Tax Demand                   40,103,9441                 Nil
 
 10) Gratuity and other post employment plans
 
 The Company has a defined benefit gratuity plan. Every employee who has
 completed five years or more of service gets a gratuity on departure at
 15 days salary (last drawn salary) for each completed year of service.
 The scheme is funded with an insurance company in the form of a
 qualifying insurance policy.
 
 11) Additional information pursuant to the provision of paragraph 3,4C
 and 4D of Part II of Schedule VI to the Companies Act, 1956 Similarly,
 in case of networking equipment the quantity disclosed above pertains
 only to items quantifiable in units and not other materials.
 
 The Company is also engaged in the development of Computer Software.
 The production and sale of such software cannot be expressed in any
 generic unit. Hence, it is not possible to give the quantitative
 details of sales and the information as required by paragraph 3, 4C and
 4D of Part II of Schedule VI to the Companies Act, 1956.
 
 12) Previous Year Comparatives :
 
 The figures of the previous year have been regrouped, rearranged and
 reclassified wherever necessary to conform to current years
 classification.